European Investment Bank TEN-E and EIB 2nd TEN-E Information Day Brussels 20.05.2008 Jochen Hierl, Energy Generation & Networks, Projects Directorate 28/11/2018 European Investment Bank

European Investment Bank The European Investment Bank (EIB) Long-term Finance Promoting European Objectives Created by the Treaty of Rome in 1958, to provide long-term finance for projects promoting European integration. Shareholders: 27 EU Member States Subscribed capital EUR 164.8bn Lending in 2007: EUR 47.8bn Borrowing in 2007: EUR 55bn 28/11/2018 European Investment Bank

The European Investment Bank (EIB) European Priority Objectives Priority Objectives for the EU: Cohesion and convergence Small and medium enterprises (SMEs) Environmental sustainability Innovation 2010 Initiative (i2i) Trans-European Networks (TENs) Sustainable, competitive and secure energy These are the 6 priority objectives of the 2007-2009 Corporate Objective Plan (COP) which is the Bank’s rolling business plan 28/11/2018 European Investment Bank

Sustainable, Competitive and Secure Energy Five priority areas: Renewable energy Energy efficiency Research, development and innovation Diversification and security of internal supply (including TEN-E) External energy security and economic development Loans of EUR 5.9bn within EU in 2007: EUR 1.4bn to renewable energy projects EUR 1.3bn to TEN-E projects Total loans of EUR 21.7bn within EU 2002-2007 EUR 3.4bn to renewable energy projects EUR 4.3bn to TEN-E projects Loans of EUR 5.9bn within EU in 2007 + 1.2bn outside EU: EUR 1.4bn + 0.5bn to renewable energy projects EUR 1.3bn to TEN-E projects Total loans of EUR 21.7bn within EU 2002-2007 + 4.8bn outside EU EUR 3.4bn + 0.8bn to renewable energy projects EUR 4.3bn to TEN-E projects 28/11/2018 European Investment Bank

European Investment Bank TEN-E Loans signed in 2007 RED ELECTRICA DE ESPANA Reinforcement and extension of electricity transport network in Spain and international interconnections (2 submarine cables to Morocco and the Balearic islands, and 3 cross country links to Andorra, Portugal and France) EDA POWER grid connections and reinforcements in the Azores islands NATIONAL GRID TRANSMISSION Reinforcement and extension of high-voltage electricity transmission network in England and Wales HELLENIC NATURAL GAS Extension to the Greek natural gas supply network 2008 Annex3 Priority Loan SAPEI submarine cable Sardinia – mainland Italy : 1.6 – 2/4 – 300 M€ VERBUND part completion of HV ring : 3.61 – 2 – 100 M€ SAPEI 28/11/2018 European Investment Bank

European Investment Bank EIB FINANCING TEN-E 2002-2007 Loans amounting to EUR 4.1 billion for Gas Networks & LNG EUR 1.3 billion for Electricity Networks in support of: Large cross border projects (electricity interconnectors, gas supply pipelines) Expansion/reinforcement of transmission networks including storage LNG terminals 28/11/2018 European Investment Bank

Some insights from recent internal evaluation Financing of transport and energy infrastructures in Europe one of EIB’s core activities since its foundation. Since the start of TEN initiative in 1990's, TEN is important lending priority for EIB. Total loans for TEN projects amounted to EUR 86.8 bn between 1995 and 2005. EIB provided significant financial value added to the projects by providing the required, often very large, financial resources in line with the needs of the promoter and at competitive rates and terms. Transport and energy TEN infrastructure financing is well established within EIB. EIB has developed specific knowledge from cross-border mega-projects. This knowledge is increasingly requested for project preparation. 28/11/2018 European Investment Bank

CHANGING/CHALLENGING ENVIRONMENT Full opening of the energy markets in 2007 Enlarged EU Integration of renewable energy Growing dependence on import Turbulent global energy markets Environmental sustainability 28/11/2018 European Investment Bank

Benefits of an EIB Loan to TEN-E Benefits of low cost of funding by AAA-rated bank passed on to clients: Large amounts Broad range of currencies Long maturities Attractive interest rates Catalytic effect on participation of other banking or financial partners 28/11/2018 European Investment Bank

HOW EIB CAN CONTRIBUTE TO TEN-E FUNDING Risk/guarantee schemes EIB transactions priced to cover the cost of funding, administrative costs and pricing for loss risk. In addition, EIB seeks adequate security such as from: a bank or banking Syndicate a financial institution a parent company with good credit rating 28/11/2018 European Investment Bank

Financing of Trans-European Networks (TEN) In addition to normal EIB loans to TENs projects: Structured Finance Facility : to fund projects with a higher-risk profile and enable equity financing and guarantee operations for large-scale infrastructure schemes TENs Risk Capital Facility: lent either directly to specific small-scale projects or via specialised venture capital companies which can inject equity into transport infrastructure. This is currently under discussion. TENs Guarantee Instrument (transport): funded by the EU budget and managed by the EIB taking the revenue ramp-up risk in the early years of TENs projects 28/11/2018 European Investment Bank

PROJECT REQUIREMENTS: Projects should: Be technically sound Be financially viable Add value and show an acceptable economic return Comply with EU environmental protection standards Comply with EU procurement regulations Have adequate security A project assessment with many facets 28/11/2018 European Investment Bank

European Investment Bank The EIB project cycle Between Management Committee and Board of Directors the project information is passed by the Member States and Commission for tacit approval/opinion. 28/11/2018 European Investment Bank

European Investment Bank For more information… http://www.eib.org/ info@eib.org Tel: +352 43 79 22 000 j.hierl@eib.org 28/11/2018 European Investment Bank